For the reasons described below, we are returning to you for reconsideration
a draft proposed rule from the Department of Veterans Affairs (VA)
entitled, "Evidence of Permanent and Total Disability" submitted
to the Office of Management and Budget (OMB) under Executive Order
(E.O.) No. 12866 on April 16, 2001.

This rule would create three new presumptions in the VA non-service
connected pension program for certain veterans. In order to be eligible
for such a pension, a veteran must have wartime service, meet certain
income and net worth requirements and be "permanently and totally
disabled." This proposed rule would create three categories of veterans
who were presumed to be "permanently and totally disabled." The
three new categories are: 1) the veteran is age 65 or older; 2)
the veteran is a patient in a nursing home, and 3) the Social Security
Administration (SSA) determines that the veteran is disabled for
the purposes of any benefits administered by that agency.

In discussions with VA staff on this rule, several concerns have
arisen about each of the individual presumptions that VA is creating.
The first presumption, that veterans age 65 or older are permanently
and totally disabled, was specifically eliminated by Congress in
1990 from the statutory authorization for the pension program. To
reinstate this presumption would contradict the statutory authority
and intent of the program. With regards to the second presumption,
veterans in nursing homes may be there for temporary convalescence
whereas the pension program is clearly intended for veterans who
are expected to be disabled for life, not for intermittent periods
of disability. Finally, VA is required by law to provide pensions
only to permanently disabled veterans. SSA requires a person only
to be continuously disabled for 12 months and designates some beneficiaries
as "medical improvement expected."

In addition, the stated purpose of the proposed rule is to increase
efficiency in claims processing. However, in both the rulemaking
document and supporting analysis, VA fails to account for the fact
that additional claims will be filed as a result of these new presumptions.
VA's assessment of costs is based solely on existing claims data.

Due to the concerns identified above, we are returning this rule
for your reconsideration. Our staff is available for further discussion
with you on these issues.

Sincerely,

/s/

John D. Graham
Administrator
Office of Information and Regulatory Affairs